John Key says that with only a limited amount of money being available, trade-offs have to be made. Photo / Mark Mitchell

John Key laid down a challenge to teachers yesterday - sacrifice part of a pay rise so school support staff can have one.

Speaking at the Council of Trade Unions' conference, the Prime Minister was challenged by Frances Guy from the teachers' and support staff union, the NZ Educational Institute, over the nil pay increase offered to support staff.

The staff - including teacher aides, administration workers, librarians, nurses and therapists - are negotiating for a new collective contract.

Mr Key said the staff were in a difficult position in their negotiations because of the fiscally restrained environment.

"Maybe one option is you guys ought to go and talk to your fellow unions and say, 'Let's have teachers taking less of a pay rise so it can be put toward education support staff'. See if they support you."

CTU president Helen Kelly said the union had discussed similar ideas with the Minister of Finance, as the lowest-paid state workers were a priority for the CTU.

Although the union was open to discussing the idea, she did not believe higher earners should have to forgo any chance of a pay increase so the less-well-paid could benefit.

Mr Key later said only a limited amount of money was available and trade-offs had to be made, including in wage negotiations.

"If wage rounds are high, ultimately it means the government can employ fewer people, or some people are going to miss out. And I think that's something that's worthy of consideration."

Labour's education spokesman, Trevor Mallard, said it was "outrageous" to propose setting the education groups against each other.

"You don't take money off one group of people in a workforce to pay another. This is a priority area and in the end the Government has to find the cash for it."

Mr Key had warned those at the CTU conference that public sector pay rounds would be affected.

Labour had $2.6 billion increases in each of its last five budgets, but from next year the National Government would have only $1.1 billion extra.